Minutes after pundits and political strategists received exit poll data, they began unpacking why voters of all ages, genders, and ethnicities voted for Donald Trump to be the 47th president. The answers to relatively straightforward questions can have complex meanings, but not that complex. Many voters clearly had inflation and the economy, including energy prices, at the top of their minds when filling out their ballots.
Energy prices increased sharply under President Biden’s watch. Household electricity bills climbed, and when inflation raged in June 2022, the price at the pump was over $5 per gallon. High energy prices, particularly for gasoline and home heating and cooling, can significantly impact household budgets for many American families. Energy costs are often one of the largest monthly expenses, alongside housing, food, and other essentials. When energy prices rise, families have less money available for other goods and services. Inflation, driven largely by energy price hikes, can erode household purchasing power and living standards. Voters remember that.
Higher energy bills may be the difference if a family goes on vacation or buys a new dishwasher. Much worse, it may be the difference between keeping the heat on and putting food on the table or buying medicine. Low-income, fixed-income, and middle-class families tend to be more sensitive to fluctuations in energy prices, as energy costs comprise a larger percentage of their overall spending.
The economic pain of higher energy prices extends beyond the direct financial burden on households, further concerning and frustrating voters. For instance, rising costs for farmers, transportation, and manufacturing tend to get passed along to consumers through higher prices for goods and services. If businesses absorb higher costs, it means fewer resources for pay raises, hiring more employees, or investing in new products.
The Biden-Harris administration was blamed for inflation—fairly and sometimes unfairly. Part of the issue was like a political game of hot potato: merely bad timing. Russia invaded Ukraine. Businesses, including energy producers, continued to grapple with supply chain problems from the pandemic. Massive stimulus plans by the Trump and Biden administrations supercharged consumer spending when supply struggled to keep up. Policies and regulations that restricted energy development, trade, and immigration exacerbated those challenges.
Policy decisions that adversely affect current and future supplies do fall squarely on President Biden’s shoulders. This administration has implemented stringent power plant regulations, began a forced transition to electric vehicles, canceled the Keystone XL Pipeline, restricted access to energy-abundant lands, paused LNG exports, raised tariffs on clean energy, and distorted energy markets with massive subsidies – just to name a few. It is worth remembering Roger Pielke Jr.’s iron law of climate policy: when policies focused on economic growth confront policies focused on emissions reductions, it is economic growth that will win out every time.
The next Congress and Trump administration have an opportunity to do something different. A policy agenda rooted in economic freedom can improve living standards and further decouple economic growth from greenhouse gas emissions. As I recently wrote with Devin Hartman at the R Street Institute, it would be prudent to “embrace entrepreneurship and consumer choice. That does not mean reducing permitting burdens for resources they prefer and ending subsidies only for progressive-backed resources. It means a phase-out of subsidies for all mature technologies alongside technology-neutral permitting reform.”
The personal and economic consequences of high energy prices are a significant pocketbook issue that understandably garners the attention of many American families and shapes their voting priorities. President Trump can’t wave a magic wand to lower gas prices to $2 per gallon. But he can work with Congress on pro-growth tax policy, speeding up permitting processes, reducing barriers to trade, and spurring more innovation at America’s national laboratories.
Policies that unleash the human ingenuity of innovators and entrepreneurs will provide affordable, reliable energy for American families, build a stronger economy, improve the environment, and reduce the risks of climate change.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
